oversight

Atlanta Task Force for the Homeless, Atlanta, GA

Published by the Department of Housing and Urban Development, Office of Inspector General on 1996-11-04.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                                       U.S. Department of Housing and Urban Development

                                       District Office of the Inspector General
                                       Richard B. Russell Federal Building
                                       75 Spring Street, SW, Room 700
                                       Atlanta, GA 30303-3388
                                       (404) 331-3369




November 4, 1996                                  Audit-Related Memorandum
                                                        No. 97-AT-248-1802


MEMORANDUM FOR:    John Perry, Director, Community Planning and
                     Development, 4AD


FROM:   James D. McKay
        Acting District Inspector General for Audit,
        Southeast/Caribbean, 4AGA

SUBJECT:   Accounting System Evaluation
           Metro Atlanta Task Force for the Homeless
           Supportive Housing Program
           Grant No. GA06B95-1035
           Atlanta, Georgia


                            INTRODUCTION

From February 14, 1996, through March 22, 1996, we performed          a
limited review of the financial management system of the Metr         o
Atlanta Task Force for the Homeless (Task Force) as it relates to
the HUD-funded Supportive Housing Program Grant No. GA06B95-1035.
HUD awarded the $12,451,233 grant to the Task Force on Novem    ber 30,
1995.    Under this grant, the Task Force will serve as both          a
gra ntor to 15 subrecipients and as a grantee providing direc         t
supportive housing assistance. As a grantee, the Task Force will
receive $654,150 to provide job and housing counseling, famil         y
stabil ization training, and resettlement assistance.       The Tas   k
Force will also receive $561,766 to cover costs to administer the
subrecipient agreements.

                           SCOPE OF REVIEW

The purpose of our review was to provide you with reasonabl         e
assurance that this recipient of HUD's Supportive Housing fu  nds has
systems and controls in place to account for the receipt an         d
disb ursement of grant funds, and to accumulate and documen         t
statistical data to demonstrate program accomplishments and   prepare
required reports. As you know, our review was not an audit    made in
accordance with generally accepted government audit standards.
We interviewed the Executive D irector and members of the financial
management and program staff to obtain documentation to ascertain
whether: (1) an accounting system existed to capture and properly
classify project expenses, (2) the organization's staff appeare       d
knowledgeable of its responsibilities as a grant recipient o          f
Federa l funds and to its subrecipients, (3) the organization i       s
legally established, and appea red viable, and (4) the organization
otherwise appeared reasonably  prepared to carry out the objectives
of its Supportive Housing Program.     We looked for areas whic       h
indicated a need for technical assistance and guidance by you         r
office.

                            OBSERVATIONS

We con cluded that the Task Force has established organizational    ,
financial management, and prog ram performance systems necessary to
satisfactorily accomplish its HUD sponsored Supportive Housin       g
Program.      The organization has had prior experience i           n
administering Federal grants and has an extended history of   helping
homele ss families.    We offer the following comments for you      r
further discussion with and assistance to the Task Force.

     The Task Force did not have, as part of its financia            l
     management system, a means of   allocating costs as required by
     OMB Ci rcular A-110.     Proper accounting for the Supportin    g
     Housing Activities requires th at the Task Force have a method
     to identify direct and indirect costs and to properly alloca   te
     those costs among the various programs and activities i         t
     operates.    Costs claimed against Federal grants in prio       r
     periods may be affected and may need to be adjusted because    of
     the lack of an allocation base and method.

     On June 13, 1996, the Task Force submitted a budget estimati  ng
     what it will cost to provide a dministrative support to the 15
     subrecipients. The budget, whi ch totals $206,224, is only for
     1 year of the 3 year grant period and leaves $355,54           1
     unbudgeted.    The budget includes staff costs of $151,124     ,
     equi pment costs of $11,200, operations costs of $3,900 an     d
     audit costs of $40,000.

     The justification for the staff line item shows that th        e
     project director will spend 50 percent of his time directing
     the Supportive Housing Program and 50 percent of his tim       e
     directing the HUD Innovative Program for the first 6 months.
     After the first 6 months, the  director will spend 100 percent
     of his time on the Supportive  Housing Program. Since both of
     these programs are on-going, it is not clear who will direct
     the HUD Innovative Program. The justification also includes
     75 percent of the salary of a  consultant/grant monitor. This
     person is to monitor programs and contracts, and develo        p
     additional resources for the subrecipients.          Developin    g
     additional resources for the subrecipients would not appear      to
     be a Task Force function.

     The budget includes a $40,000  line item for audits. The Task
     Force states it will use its o wn auditor to perform audits of
     subre cipients who are not currently receiving an audi            t
     acco rding to OMB Circular A-133. The budget justificatio         n
     does not state if this is to be a staff auditor or a              n
     individual practitioner the Ta sk Force hires to perform audit
     work for them. The justification does not state how man           y
     audits will be performed.

     Because of the amount of funds involved, we believe you shou     ld
     require the Task Force to provide a budget for the 3 years        .
     You should review this budget to assure all programs pay the     ir
     own way and that the positions listed are needed to administ     er
     the program. Any funds not needed for administration should      be
     returned to the subrecipients so they may provide additional
     direct service to the homeless population.

     The Task Force had not obtained audits of fiscal years 199      4
     and 1995 activities, despite having received almost $2 milli   on
     in Federal assistance. An audit covering the 2 year perio       d
     was scheduled to begin in May   1996. Currently, the Task Force
     1994 audit is in its final stages and the 1995 audit ha         s
     begun. You should monitor the progress toward completion of
     both audits.

     Checks are required to be countersigned by the Executiv           e
     Director and Co-Executive Director. However, because thes         e
     two individuals are husband and wife, the dual signatur           e
     con trol is ineffective.   We suggest that you require th         e
     second signature to be from an unrelated Board member.



                   *      *      *       *      *

This memorandum is for your in formation; no response is necessary.
If you have any questions or need additional information, pleas     e
contact Nancy H. Cooper, Assistant District Inspector General for
Audit at 404-331-3369.
                            DISTRIBUTION


Director, Community Planning and Development Division, 4AD
Director, Interagency Council on the Homeless, DE
Director, Metro Atlanta Task Force for the Homeless